1981 (10) TMI 148

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....ld to another company called "Mindia Chemicals Limited" the business in (i) distribution and dealership in rubber chemicals; (ii) agency, indent and resale business relating to rubber chemicals; (iii) agency relating to other goods and products and services; and (iv) all other business of whatever nature (excluding the business of manufacture and distribution of or dealership in agro-chemicals then carried on in India by the assessee, the vendor) as a going concern together with all the assets, claims, debts and liabilities of the said business including the goodwill. The full benefit of pending contracts, engagements and orders in connection with the said business and the corresponding obligations attached thereto were also transferred to ....

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....presents the net value of the assets taken over as a going concern. The assessing authority took the value of the chemicals and other goods as having been sold in the course of business and did not accept the assessee's claim that there was a sale of the business as a going concern. The question now before us is whether this conclusion is right. Rule 6 provides that in determining the taxable turnover the amounts specified in the several clauses thereof should be deducted from the total turnover of a dealer. One of the items to be deducted is the amount realised by a dealer by the sale of his business. The question as to the scope and ambit of rule 6(d) has been examined in Deputy Commissioner (C.T.), Coimbatore v. K. Behanan Thomas [197....

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....nsequently, such sale proceeds being totally outside the scope of the Act cannot form part of the turnover as defined in the Act and hence such turnover is not exigible to tax under the provisions of the Act. If so, the question of such sale proceeds being deducted from the total turnover under rule 6(d) of the Tamil Nadu General Sales Tax Rules, 1959, will not arise because that rule contemplates determination of the taxable turnover by deducting the items mentioned therein from the total turnover of a dealer. Once it is found that the sale proceeds in question did not form part of the turnover at all, there is no question of the same being deducted from the total turnover for the purpose of determining the taxable turnover." Even on th....